SEC Cracks Down on Capital Market Violations

The Securities and Exchange Commission (SEC) has intensified its efforts to shield investors in Nigeria’s capital market from fraudulent activities.

Dr. Emomotimi Agama, Director-General of SEC, stressed the Commission’s unwavering focus on cracking down on unethical practices, stating, “So, clearly for us, it is getting people to understand that there is no hiding place anymore for anybody that has the intention to defraud Nigerians and to defraud anybody that is investing in this market.” SEC has adopted a zero-tolerance policy towards fraud.

Promoting Ethical Standards

As outlined by Dr. Agama, the Investments and Securities Act (ISA) 2007 provides the regulatory framework that mandates high ethical standards for operators in the market. He elaborated on the “fit and proper person’s test,” a crucial criterion for operators to sustain their licenses.

“This is because the very ethics of regulating or registering a securities market operator is in the principle of the fit and proper person’s test,” he noted. He added, “What you have been seeing most recently by the revocation of licenses, the suspension of operators and our follow-up to operators that are not registered with the SEC is only a tip of the iceberg as to what we intend to do this year.”

Dr. Agama assured stakeholders of the SEC’s commitment to employing its regulatory powers to deter fraudulent practices, saying, “We believe strongly that a protected investor is a powerful investor.”

Key Developments to Note

Recent SEC initiatives include the creation of a “name and shame” journal, which publicly identifies Capital Market Operators who breach regulations. This approach underscores the Commission’s stringent enforcement stance.

In a notice titled “Additional Enforcement Measures on Erring Capital Market Operators,” SEC revealed plans to impose significant penalties on violators to deter misconduct.

Dr. Agama urged collaboration among stakeholders to foster a transparent and reliable capital market, highlighting compliance and information disclosure as foundational elements for achieving this goal. He encouraged market participants to align with the Commission’s principles.

This decisive action forms part of SEC’s broader strategy for 2025, aiming to eliminate unauthorized activities within Nigeria’s capital market.